Wednesday, June 1, 2011

Interview with Geoff Harcourt

Geoffrey Colin Harcourt is an Australian and leading Post Keynesian. He spent many years at Cambridge University (UK) as a Fellow of Trinity Hall (1964-1996), University Lecturer (1982–1990) and Reader (1990–1998) in the Faculty of Economics, and a Fellow and College Lecturer in Economics, Jesus College (1982–1998).

Harcourt knew the other big name Post Keynesians like Joan Robinson and Nicholas (“Nicky”) Kaldor, and this is a two part interview, of great interest for the history of Post Keynesian economics, and filled with many anecdotal gems.

In Part 2 (from 20.00), Harcourt talks about Lorie Tarshis and his textbook summary of Keynes’s General Theory for American universities in the 1940s, which was attacked by conservatives. Tarshis’s accurate summary of Keynes was rejected for Paul Samuelson’s neoclassical version of Keynesianism (the neoclassical synthesis). Another crucial point is that stagflation can be easily explained by a proper understanding of Keynes’s theory, and was a problem for the neoclassical Keynesians, not Post Keynesians (for the Post Keynesian explanation of stagflation and the solutions to it, see Kaldor 1976).

"Guilt" is the wrong word. One cause of stagflation was certainly bad government policy.

Also, workers demanded excessive wage rises and businesses raised prices in response, leading to a wage-price spiral and vicious circle, and that was a major cause too. Some kind of incomes policy or wage-price controls was the solution. In the long term, commodity buffer stocks will prevent stagflation.